On Thursday 7 April, Kenya’s finance minister announced a €26 billion budget for the country’s economic recovery. This is to address the loss of hundreds of thousands of jobs due to the health crisis and conflicts around the world.

Announced some four months in advance, the budget 2022-2023 provided for billions of dollars of investment in infrastructure projects spearheaded by outgoing President Uhuru Kenyatta, mostly funded by China. Secretary to the Treasury Ukur Yatani told parliament that the budget aims to “put the economy back on a more sustainable growth path”.

D’après ses explications, l’économie kenyane devrait croitre de 6% cette année, comparé à 7,6% l’année précédente. In 2020, GDP fell by 0.3%, the first decline since 1992. With this budget, the country expects to reduce the deficit to 6.2% of GDP, compared to 7.5% last year. Indeed, if this budget is approved by parliament, the government will also spend 146 billion shillings (1.27 billion dollars or 1.1 billion euros) on the “Big Four” programme, which sets four priorities for the country: health, housing, security and industrial development.

Hundreds of thousands out of work after Covid 19 pandemic

Kenya is one of the East African countries most affected by the Covid 19 pandemic. For example, the health crisis has significantly reduced income from tourism, the engine of the economy. So in 2020, more than 700,000 people have lost their jobs and are still facing high prices for everyday goods such as food and fuel. This was followed by the drought in several parts of the country. Public debt thus increased in 2020 to 72% of GDP from 61% in 2019, mainly due to public investment in infrastructure, debt management problems and the Covid 19 crisis.

According to the International Monetary Fund, Kenya is currently in a situation of “high risk of debt distress”. To address the potential risks of fiscal vulnerability and indebtedness, the implementation of growth-enhancing reforms, external financial assistance, soft loans, and debt refinancing and restructuring are needed. In this very delicate position, the Kenyan government through this budget shows its commitment to the welfare of its populations.